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Thursday, 30 April 1936

In connexion with the shale oil industry, very full technical information is available regarding the economics of production. It has become evident that, in order to establish the industry, it will be necessary to exempt it from the payment of excise duty over a period of years. This would involve substantial inroads upon revenue. The Government has, however, examined the position from every angle and, in the light of more recent world developments, it feels that it is compelled to ignore the economical aspects of production and make the defence requirement paramount.

Newnes is capable of producing at least 7,250,000 gallons of petrol per annum, and production can, in case of national emergency, be changed over immediately to fuel oil or to fuel oil and petrol. It can, with some expansions, which can be arranged at short notice, produce at least the nucleus of the Commonwealth's basic requirements of oil and petrol for the defence services.

In view of this, it has been decided that petrol production from shale in Australia, up to a maximum of 10,000,000 gallons per annum, shall be granted, for a period of twenty years, protection over imported petrol to the extent of the customs and excise duties at present operating. The effect of this would be that, ifthe present customs duty of 7d. a gallon on imported petrol, or the excise duty of 51/2d. a gallon on petrol produced from imported crude oil, are reduced during the next twenty years, a subsidy equivalent to the amount of such reduction will be paid on petrol produced from Australian shale up to the maximum of 10,000,000 gallons per annum.

Offers will be publicly invited from companies or persons desirous of operating the Newnes shale oil undertaking on this basis. The Commonwealth Government at present holds the option over plant, machinery, &c, at Newnes, which originally cost considerably more than £1,000,000 and can now be secured for £34,500.

In connexion with this invitation, it should be clearly understood that the Governments of the Commonwealth and New South Wales regard it as essential that any company selected to operate Newnes must have personnel with high engineering and technical qualifications in addition to substantial capital resources. The .Newnes Investigation Committee has set down capital requirements at £600,000.

The position to-day is that coal petrol in England enjoys protection of Sd. a gallon; shale petrol has never paid excise duty and has been protected by customs duties for a period of years. In Germany coal spirit enjoys preference over the petroleum product in the form of remission of taxation of approximately ls. 8d. a gallon.

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